Recent developments indicate that Toys R Us lenders are attempting to revive the brand.
The lenders that now control Toys R Us – including Solus Alternative Asset Management and Angelo Gordon – have U-turned on their decision to auction off the company’s intellectual property, according to documents unearthed by Bloomberg.
After liquidating the toy retail giant in March, a revival of the Toys R Us and Babies R Us brands appears to now be on the cards, as the lenders seek to reorganise the assets into a new company that will maintain the current licence agreements and invest in new retail operating businesses.
According to the Monday bankruptcy court filing, maintaining the brands under a new, independent US business – since revealed to be operating under the name Geoffrey, LLC – offers the best hope of recovery for the Toys R Us estate, and presents the best option for indirect and direct stakeholders.
“The qualified bids were not reasonably likely to yield a superior alternative,” the filing stated.
The companies control the Toys R Us brand name because it served as collateral on loans they issued to the retailer. However, American hedge funds including SilverPoint Capital and BlueMountain Capital Management claim to be owed £35m by the admininstrators, which could complicate the attempted revival.
In addition, there are growing calls to create a hardship fund for those Toys R Us employees left out of work when the retailer went under. Some 33,000 US employees found themselves without jobs when 182 locations were closed as part of the bankruptcy proceedings.
Overnight, reports began to emerge that Geoffrey – Toys R Us’ recognisable mascot – was walking the floor at the Dallas Fall Preview (replete with a cape saying ‘Back from Vacation’). Toy industry expert James Zahn (AKA The Rockfather) has been following the developments closely from Dallas, revealing that on 20th June – just nine days before the final American Toys R Us stores were shuttered – Geoffrey, LLC filed for a trademark on a new name: Geoffrey’s Toy Box.
This is the very same Geoffrey’s Toy Box that is exhibiting in Booth #13-3229 at the Fall Toy Preview.
The company’s pitch sheet reads: “Wholesale toy distributor and intellectual property company whose focus is on popular play patterns across trusted brands that kids and parents love. Geoffrey’s Toy Box is a fully outfitted organization with design, development and global sourcing expertise. Portfolio includes popular brands like Journey Girls, Fastlane, True Heroes, You & Me, Imaginarium, Just like Home and more!”
As James notes: “On the surface, that sounds like a way to bring together all the Toys R Us private-label brands (that would’ve been auctioned) under one roof with the opportunity to start selling those products to other retailers. But the trademark filing wasn’t just for a host of potential products, but also for retail locations both online and off.”
Emotions are running high, with many taking to social media to voice how they feel about the news. Deborah Branch, former global brand apparel product development, sourcing and production manager at Babies R Us, commented on LinkedIn: “How could any corporation trust them again after they left so many in despair? They put in orders they had no intention of paying. Got rid of 33000 employees with no severance pay and no earned vacation time. No matter what they do, this company will never maintain the integrity it had before the bankruptcy.”
James also shared his thoughts: “I know a lot of people who’ve long-suspected that this was part of the plan… to keep pushing that auction back until they could safely pull a hard reset – the opportunity to start #ToysRUs 2.0 as a fresh company with no baggage.”
“The question: Will the #ToyIndustry support this knowing who’s lurking behind the curtains? And will customers support it after so many other retailers have fought to capture a piece of the pie?”